Alcolumbre picks PL senator to report 2027 budget guidelines bill - Economy and business

Senate President Davi Alcolumbre has chosen Eduardo Gomes to oversee the bill setting guidelines for Brazil’s 2027 budget, a role that will require negotiations with the government and Congress.

Senate President Davi Alcolumbre has selected opposition senator Eduardo Gomes of the Liberal Party (PL) to report on Brazil’s 2027 Budget Guidelines Law, according to two people familiar with the negotiations. The appointment was expected to be formalized on Wednesday, November 4.

The law sets targets, priorities and rules for preparing the following year’s budget. Its provisions can constrain or give the executive branch more flexibility over spending. The rapporteur negotiates changes to the bill and drafts an opinion, which must then be approved by the Joint Budget Committee and Congress.

Gomes, a former government leader under Jair Bolsonaro, is part of the opposition but is a close ally of Alcolumbre and a more moderate wing of the PL. His selection comes as Alcolumbre seeks support for re-election as Senate president. The PL announced Senator Rogério Marinho as its candidate to challenge him on Wednesday. The vote is secret, and Alcolumbre is counting on defections within the PL and support from other right-wing parties.

The 2027 guidelines bill reached Congress in April but was only assigned for discussion in the Joint Budget Committee on Wednesday, leaving a compressed schedule. The current timetable calls for an initial report next week and a congressional vote by December 12.

Among the issues under consideration, the government’s economic team is studying whether to seek authorization to aim for the center of the fiscal target and freeze additional budget resources if needed to improve the public debt trajectory. Current fiscal rules allow the primary balance target to vary by 0.25 percentage points of GDP in either direction. In recent years, the lower limit has effectively become the target, a practice critics say has contributed to weaker public accounts and worsened market expectations.

Gomes has contacted allied lawmakers to tell them he will serve as rapporteur and invite discussion of changes. One area of particular interest to legislators is the bill’s provisions protecting certain sectors from cuts and setting spending priorities for the budget. The report said Gomes did not comment when approached.

Sources: Folha Mercado.